The Difference Between Liability, Collision and Comprehensive Coverage

Auto insurance policies come with many options. The most common inclusions are liability, collision and comprehensive coverage. Each coverage is unique and applies to different situations involving your vehicle. It’s important to understand these options so you can make informed decisions to protect your car and finances.

Liability Coverage

Auto liability coverage can help pay for losses you inflict on others. It does not apply to your own losses. Liability coverage is typically available in two parts—one or both of which may be required by state law:

• Bodily injury liability can help pay for third-party medical bills and related losses you cause to others with your vehicle.
• Property damage liability can help pay for damage you cause to someone else’s property, such as their car or fence.

Collision Coverage

Collision insurance can help pay for damage to your own vehicle after an accident. This coverage can apply to collision incidents where you hit another vehicle or object. Collision coverage is “no fault,” meaning it can help pay for repairs or replacement regardless of who caused the accident.

Comprehensive Coverage

Comprehensive coverage is similar to collision coverage, but it handles different situations. Comprehensive coverage can help pay for noncollision damage to your vehicle. Incidents may include falling objects, vandalism, theft and animal strikes.

Similarities Among Coverages

While liability, collision and comprehensive coverage are all unique, they do share similarities. Each coverage option has limits, meaning there is a maximum your policy will cover per claim. Make sure your limits are sufficient for your risk tolerance and financial circumstances.

Collision and comprehensive coverage each have deductibles, as well. A deductible is the amount you must pay per claim before insurance kicks in. When crafting your policy, ensure you can afford the deductible; you may also adjust it in many cases. Liability coverage typically does not have a deductible.

Additionally, liability, collision and comprehensive coverage may all be required in some cases. Liability coverage is often required by law, and all three are usually needed if you have a lease or loan on the vehicle.

How to Decide What You Need

Primero Insurance is here to help find affordable auto insurance near you. We can evaluate your circumstances and suggest various coverage options to keep you in compliance with the law and other obligations. Contact us today to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.